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Will the Markets be affected by news of the General Election in July?
On Wednesday 22 May, the same day inflation fell to 2.3 per cent1, the Prime Minister - Rishi Sunak - announced a general election would take place on Thursday 4 July 2024.
So what does this mean for the Markets?
First of all, it’s natural to feel somewhat disconcerted at the thought of change. The Conservative Party has been in power since 2010, initially as a coalition with the Liberal Democrats and, subsequently as a result of a series of majority and minority governments. During this time the country has been led by David Cameron, Theresa May, Boris Johnson, briefly with Liz Truss, and finally with Rishi Sunak.
Over that period and following a referendum in 2016, we have seen the Brexit vote and subsequent withdrawal of the UK from the EU in 2020, the unprecedented pandemic of Covid-19, and a disastrous mini-budget in 2022. The UK economy has had a lot to bear to put it mildly.
The important thing to remember is that while markets are inherently uncertain in the short term, history tells us that they benefit from strong growth over the longer term (see the graph below). That is why it is so important to take a medium- to long-term view in investing, and to know exactly what it is that you are looking to achieve.
To put things in perspective, if we are working with a sensible 5-years-plus time horizon, we will already have the next election behind us by the time we are looking to cash in. Working with a Financial Adviser can help you keep the bigger picture in mind and, crucially, help you avoid any hasty decisions. Uncertainty in markets is inevitable and psychologically challenging. It should not be the deciding factor in your decision-making.
Meanwhile, the press is awash with speculation as to what might happen next, reporting on one swipe to the next and of course the latest polls. You can view the key policies of the Conservative and Labour manifestos on The Independent website, discussing the economy, future taxes, the NHS, Immigration and Education.
Remember, however, that talking with your Financial Adviser will help you to navigate the economic and political landscapes to give you peace of mind and to ensure your financial plans remain on track to meet your future goals and aspirations.
If you have any immediate requirements, please do get in touch.
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